Terry Semel, conducted by Kara Swisher, and Sergey Brin and Larry
Page, conducted by Walt Mossberg, at D: All Things Digital. As with
all my conference notes (wherever, whenever), please don't mistake
these jottings for a verbatim transcript or a complete portrayal. They
are necessarily paraphrased and incomplete, and the product of my
highly selective and imperfect notice and attention.
Terry Semel
Swisher: There have been some remarkable changes at Yahoo since you
came on board. (Mentions articles that initially expressed skepticism
about Semel's suitability for the role.)
Semel: For me, it was time for a life change. I examined things,
invested in some Internet related things. I wanted to be involved with
a business that had great products. I was attracted to Yahoo because
it was the best brand on the Internet, and it had a huge audience.
There are now some 112 million active registered users.
Swisher: What is Yahoo now?
Semel: That's a very simplistic question. Not sure if there is an
answer. Some people would refer to Yahoo as a portal, or a platform,
or a network. Probably it's the most relevant place to come for
anything you want. The premise is if services and products are great,
you'll spend more and more time there. It's not just search, travel,
sports, or finance, but getting more personalized, so you the user can
design what you want when you want it.
Swisher: Is it a media company?
Semel: I'm surprised you'd use such a traditional word, but it fits if
you like.
Swisher: (Asks about Yahoo's success in maintaining advertising
revenue.)
Semel: Yahoo's advertising sales now exceed AOL's. Traditional
advertising required a lot of handholding. You're starting to see more
creative advertising, more use of rich media. Some similarities to TV
advertising, but there will be great differences. Broadcast television
remains the most effective way to reach the masses. The Internet is
the second most effective. In the last year we've seen an enormous
change of attitude on both sides. We have a much deeper list of
clients starting to believe they're getting their money's worth. We
have seen growth for five quarters in a row in our traditional
advertising business.
Swisher: (Asks about sponsored search.)
Semel: Sponsored search is auction oriented, very effective for small
and medium sized businesses. Works well for all three sides: the
advertiser, Yahoo, and the user. Yahoo still is committed to pure
search, but users find it a little more organized and relevant when
they're getting a "recommendation." It's like the yellow pages.
There's a stronger temptation to go to a company you've heard of with
a big ad.
Swisher: Let's talk about premium services and extras. There's no
proof people want to buy these things. What do you think?
Semel: Look at the track records in other fields, like cable
television. People are accustomed to spending money for certain
things. Conservatively, 50% of AOL users are regular Yahoo users.
Yahoo is essentially "free" to them, so maybe they're willing to pay
for certain basic extra services (extra email storage, centralized
data access). Yahoo is co-branding with SBC to provide access and
services. There's not a single doubt in my mind that people are
getting accustomed to paying for certain specific services or
products, while still getting certain quality services for free. If we
continue to improve the quality of our free services, they will
support the pay services, and vice versa. We thought it was important
to offer access to listings for personals, jobs and real estate. We
decided we needed to buy the jobs segment and personalize it. In the
case of personals, we decided we can build it in house and do it
really well, but I gave it an advertising budget of zero. The goal was
to become #2 in that market with no advertising beyond our own
network.
Swisher: What about entertainment? (Mentions AOL, People Magazine
online.) As a content maker, what do you think of that happening? What
about music?
Semel: 10-11 million people use Yahoo's Music Launch service. There
have been 125 million music videos downloaded. Music can and will be
successful in its own right. So many people use the 'Net to legally
listen to the music they want. There are music clubs. These are
perfect examples of the kind of extra services people will pay for.
Swisher: (Asks about whether the music industry will cooperate with
online services to give users what they want.)
Semel: As former chairman of one of the five major labels, I see a
shift in attitude. The tone used to be, "let's sue them." The industry
has done a good job moving away from this. What Steve Jobs has
accomplished in obtaining cross-licensing is great. As times change,
repackaging and repricing make the most sense. [I missed a bit
here...] They're going too slowly though. Now is the time to bring the
Internet in, before it becomes too late. The industry should get
involved sooner rather than later.
Audience Questions for Semel
Audience member: Jack Warner once cautioned the movie industry not to
sell to TV. The result was to encourage innovation in the new medium.
Will this happen on the Internet?
Semel: I'm a total believer in the changed medium. Things start out
looking like what you're used to, you begin by slicing and dicing
what's there. HBO started by broadcasting movies, then moved on to do
its own series and other things. The Internet too will begin with
slicing and dicing what we've seen before, but that won't be the big
killer app. That's going to be original hits that take advantage of
the unique aspects of the Internet, and they'll be very different from
what we usually see. Music, games. Companies like Yahoo have enormous
communities, posting and talking to each other all the time. There's
no doubt the Internet will become a major vehicle for games, all over
the world. If all you do is copy what came before, you're going to
look like an old newspaper. These new ideas could come from Hollywood,
but they're just as likely to come from users.
Audience member: Is there a role for Yahoo in convergence, everything
coming into the home through one box?
Semel: Yes, it's important to deliver what you want, where and when
you want it.
Audience member: Yahoo's cash position is huge. Are you thinking about
media properties, your own programming? Semel: Yahoo has north of 2
billion cash right now. Three years out, broadband will be in 50% of
households, and more and better content and programming will do well.
We don't need a studio now, but we'll be involved in helping people
who are doing things we feel are good for the Internet. HBO started
out with 100% licensed content, now probably 50% of what they offer is
original. And they're thriving.
David Kirkpatrick (from Fortune): Will traditional media throttle
Internet content? (Referencing things like Diller's HSN.)
Semel: On the Internet, anyone with a good idea can do it tomorrow.
Individuals can and do create stuff. It's much more open to the
creation of thriving businesses. The Internet world offers another
opportunity to reach masses. As a citizen I worry about countries
where one person controls the whole thing. The Internet helps,
generally speaking doesn't take positions on issues.
Larry Page and Sergey Brin
Mossberg: You've created great technology that works, but you're sort
of the oddball in the search industry. Take sponsored search results.
You don't do that.
Page: We've taken a hard line on that. Our search results are the best
things we can produce. You can tell our advertising is advertising.
It's even more evil when you can't tell if a result comes up because
of paid inclusion.
Mossberg: I think this is one of the best things about Google. But
from a business point of view, you're not a public company. Why would
someone buy a Google ad?
Brin: It's important to us and the users that ads be identified as
ads. We think it makes them more effective. (Gives example of
purchasing a green laser pointer from one of Google's advertisers.)
The ads themselves work well. They're a good revenue stream for Google
and for the advertisers. In fact, the ads work so well they're being
run on non-search properties, like the Knight Ridder sites. Instead of
having a flashy banner you'll see a set of text links, related to the
news story you're reading. It's not a perfect product; sometimes you
have unfortunate subject-ad pairings--headline, "Boy drowns in washing
machine," next to a washing machine ad.
Mossberg: How do you guys make any money?
Page: We license our search technology to other sites, and to the
enterprise market. Advertising is a very large source of revenue as
well.
Mossberg: What about the simplicity of the ads, why is that important?
Page: We felt like banner ads slowed down our sites and weren't
relevant. The click-through rates on the search-relevant text ads are
much higher.
Mossberg: There are companies that are pissed off at you guys because
you've become the gateway to the Internet. There are people who think
Google disadvantages them and their business.
Brin: We were sued in one case I think and I believe it was dismissed.
People tend to get really upset when they used to have a big flow of
traffic from Google, then they don't. There's another set of people
who are getting that traffic. There's not a great deal of stability in
our search results. A site might be down when we crawl it, for
example. The more important issue is that we continue to develop our
algorithms and have a rapid development cycle. People can't
necessarily rely on search results remaining static.
Page: We've earned people's trust this way through the quality of the
search.
Mossberg: Do you think your average users understand why some results
are ranked higher than others?
Brin: The whole system is very complex. I couldn't tell you why in a
given set of results one thing is higher than another. I would not
recommend following those spams that promise to increase your search
result standings.
Mossberg: Have you got this figured out for the next few years?
Page: There's a lot we can do. I still think using Google's terrible.
There's still a huge number of things we can't answer. There's
probably something out there that explains every complex query, and
Google can't give you the exact right answer instantly.
Mossberg: (Asks about specialized searches and features, like
Froogle.)
Brin: Most of the products we develop are suggestions by enthusiastic
researchers. True of Google News, true of Froogle. We encourage this,
and ultimately it's highly motivated people on our teams who conceive
these things. You look at our track record on things we planned to
launch that were successful, and the correlation is pretty weak.
Page: Innovation in general is like this. You try a lot of things,
some of them work out really well.
Brin: We have a list of that we call the Top 100, research projects in
development. It's really more like 200. Some people work on them
whether we want them to or not. (Audience laughs.)
Mossberg: It sounds like summer camp.
Brin: People create much better things when they're inspired and feel
they have ownership, it's what they want to do.
Mossberg: Let's talk about browsing. This doesn't just mean the Web,
but the way you interact with the PC, search as more of a metaphor
than it has been. Is the kind of thing you do at Google something that
could unify all this?
Page: No, Google works best on a large universe of data. With smaller
universes, something like the Apple Music Store, you may not even need
search. It will be nice to have better search functionality for your
own information, but software can provide other alternatives.
Mossberg: What about searching other documents: PDFs, images.
AlltheWeb includes music and videos. Will there be a way to use Google
to search things that are not on the public Web?
Brin: You can now throw away all your junk mail catalogs because you
can search for and browse them on Google. Regarding music and video,
there are legal issues, issues with the results really working, issues
with player compatibility; generally, usability issues beyond search
that make these problematic.
Page: We do have a fair amount of influence now. We try to consider
what it means to make all this available.
Audience Questions for Brin and Page
Audience member: Do you help users with queries on things like health
care issues to narrow down their results?
Brin: There are great sites about diabetes, and we don't have the
ability to give you better information than they can. In the future,
who knows?
Audience member: Why search? Why does it work? Page: It was obvious
for us because we didn't really want to form a company. There were
10,000 searches a day at Stanford on Google, it was working and
growing. We didn't fully understand what would happen, but had strong
indications.
Audience member: Google vs. bookmarks. Why don't you let people put
their bookmarks on your home page? You'd do serious damage to Yahoo
and AOL.
Page: Would you like a job? (Good laugh from audience.)
Same audience member: As one of the two unemployed people here, yes!
(More laughs)
Brin: This is the kind of thing people work on on the Top 100 list. It
sounds like a good idea but would need to be tested.
Esther Dyson: Asks about Google's purchase of Pyra: what have you
discovered, been surprised by, found out?
Brin: We've let those guys go at it, continue to develop their
product. They have so many ideas on their own, and there's a whole
industry of third party applications to tack onto Blogger. I'm just
trying to make sure we don't add too much "value!" (Big laugh.)
Audience member: What are the implications of being able to find just
about anything on Google?
Brin: Larry told me this some time ago: people's interests are, and
have become, esoteric and diverse. The wealth of information has
enabled people to specialize in much narrower interests. It makes it
easier for someone to specialize in a localized sphere of knowledge.
Page: I've been waiting for them to start teaching searching,
alongside spelling, in school.
posted by Denise at 9:02 PM
briefing in progress | link
It's Later Than I Think
I must remember to ask Jason Shellen if there's a way to tweak the
Blogger time stamp feature for specific posts. I don't want to shift
the whole blog to EDT just because I'm here for a few days. Speaking
of Jason, I've been cracking up at his comments about answering
lunch-line tech support questions for all the blogging Googlers. He
promises more about their internal version of Blogger, Blogger in
Google (B.I.G.), at this very conference.
posted by Denise at 6:49 PM
briefing in progress | link
Plane Reading
Spotted in transit--
From Inc. Magazine:
"Blogging for Dollars:" "Blogs have long been popular with mopey teens
looking to share their angst and political pundits eager for an online
soapbox. But they are increasingly being put to commercial use by
entrepreneurs."
"What's Next: Don't Get Brobecked:" "[D]o what you should have done
all along--manage your lawyer the way you manage any supplier
relationship, something few companies without in-house counsel ever
do." And (imagine my delight at 30,000 feet) this, and more, from Rick
Klau: "Many firms had their best year ever in 2001 or even 2002,
despite the recession, but that is just because the legal business is
slower to be affected by the economy. Even after client businesses
sour, there is still plenty of legal work to be done cleaning up the
mess. But eventually that work is finished and if the economy doesn't
pick up, then the lawyers are in trouble."
From Newsweek:
Speaking of Rick, he was the first person to turn me on to Howard Dean
last summer. Now Newsweek says of the candidate, "Dean's insurgency
may falter, but he's already made history: the first Web-launched
candidate to go mainstream in the era of BlackBerry and Bluetooth."
("Spinning a New Web.")
I didn't read the whole flight, spent most of it cleaning up D notes,
actually. Will have Semel, Brin, Page, Leonsis and Cuban posted as
soon as I rip through some room service.
posted by Denise at 6:25 PM
briefing in progress | link
Greetings From Boston
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